CONTAINERSHIP demolitions of older ships dropped in 2021 to the lowest level in six years as high charter rates encouraged owners to keep ships operating, reports Hellenic Shipping News Worldwide.
Some 16,500 TEU of a container carrying capacity was scrapped in 2021, down from 194,500 TEU in 2020 and 655,000 TEU in 2016.
In the second half of 2021, four ships were sold for demolition globally, all of which had a capacity under 1,000 TEU.
'The red-hot charter market and the astronomical charter rates obtainable have prompted [non-operating shipowners] to retain in their fleets older ships of 20-30 years of age, many of which would have otherwise been recycled had the market turned out differently,' said Alphaliner.
'These are clearly once-in-a-lifetime opportunities that NOOs could not afford to miss, despite the current attractive demolition prices.'.
For example, a 20-year-old 2,200-TEU ship was chartered last year at a rate of US$35,000 a day for a duration of 36 months. In the pre-Covid crisis era, a ship would have struggled to get fixed for $9,000 a day.
Charterers are willing to pay high charter rates because they are still profitable at current spot market freight rates.
Alphaliner expects container ship demolitions to rebound but remain low, in 2022 at around 60,000 TEU, before rising in 2023 as a raft of newbuildings pushes older ships to scrap.
SeaNews Turkey
Some 16,500 TEU of a container carrying capacity was scrapped in 2021, down from 194,500 TEU in 2020 and 655,000 TEU in 2016.
In the second half of 2021, four ships were sold for demolition globally, all of which had a capacity under 1,000 TEU.
'The red-hot charter market and the astronomical charter rates obtainable have prompted [non-operating shipowners] to retain in their fleets older ships of 20-30 years of age, many of which would have otherwise been recycled had the market turned out differently,' said Alphaliner.
'These are clearly once-in-a-lifetime opportunities that NOOs could not afford to miss, despite the current attractive demolition prices.'.
For example, a 20-year-old 2,200-TEU ship was chartered last year at a rate of US$35,000 a day for a duration of 36 months. In the pre-Covid crisis era, a ship would have struggled to get fixed for $9,000 a day.
Charterers are willing to pay high charter rates because they are still profitable at current spot market freight rates.
Alphaliner expects container ship demolitions to rebound but remain low, in 2022 at around 60,000 TEU, before rising in 2023 as a raft of newbuildings pushes older ships to scrap.
SeaNews Turkey
